New York's Federal Reserve Bank announced Tuesday that total household debt in the U.S. has surpassed $16 trillion, the largest ever.
The Quarterly Report on Household Debt and Credit, organized by the bank's Consumer Credit Panel, also showed that total non-housing balances experienced the most significant jump in six years.
"The second quarter of 2022 showed robust increases in mortgage, auto loan, and credit card balances, driven in part by rising prices," stated New York Fed economic analyst Joelle Scally. "While household balance sheets overall appear to be in a strong position, we are seeing rising delinquencies among subprime and low-income borrowers with rates approaching pre-pandemic levels."
In 2022's second quarter, there was $758 billion in mortgage originations, with mortgage balances rising by $207 billion and credit card balances increasing by $46 billion over that same period.
Mortgage balances were the largest contributor to the $2 trillion increase, even as mortgage originations slightly declined. Auto loans saw a $199 billion jump, and aggregate limits on credit cards reached $4.22 trillion, the most in a decade.
Student loan balances barely changed in the second quarter. They stand at about $1.59 trillion.
Banks analysts chalked up much of the record household debt to the effects of inflation on the U.S. economy, writing in a subsequent blog post that historically low delinquency rates were coming to an end.
"In part, the growth in each debt type reflects increased borrowing due to higher prices," they wrote, adding that the "effects of inflation are also visible in credit card balances."
"Americans are borrowing more, but a big part of the increased borrowing is attributable to higher prices," the analysts concluded.
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